Leeds sells bonds just ahead of Jefferson County bankruptcy

LEEDS, Alabama -- One day before Jefferson County declared bankruptcy Wednesday, Leeds sold about $9 million of tax-exempt general obligation bonds.

"We were very, very lucky, I'm telling you," Leeds Mayor Eric Patterson said Thursday night. "If this bankruptcy thing had happened before that, we would have been in trouble ... That would have been a major catastrophe for the city."

After Jefferson County declared bankruptcy, Assured Guarantee Municipal Corp. -- the company which insured Leeds' municipal bonds -- said it would stop insuring such bonds in the state of Alabama, Patterson said. "We wouldn't have been able to sell those bonds," he said.

Leeds sold about $6 million in bonds to help pay for a nature park adjacent to the Bass Pro Shops store off Interstate 20 and about $3 million worth of bonds for other projects in the city, including drainage improvements, road paving and an athletics complex.

Leeds was able to sell its bonds with an A+ rating and stable outlook from Standard & Poor's. The rating is the company's fifth-highest rating.

The city was able to sell the $6 million in tax-free bonds at a 4.2 percent interest rate and the $3 million in bonds at a 4.1 percent rate.

"Everything fell into place for us," Patterson said.

One factor that Patterson said helped Leeds was being able to negotiate an agreement for Moody and St. Clair County to pull out of the Leeds Cooperative District, which was established about five years ago to spawn development along I-20. This allowed Leeds to go to the bond market alone, Patterson said.

The mayor said he thinks the city's success also can be attributed to hard work by city officials, attorneys working for the city and financial officers at Merchant Capital, who helped the city achieve its A+ rating. "That allowed us to be able to accomplish this in such a smooth manner."